Low fares just for Aussies

By CHRIS DANIELS consumer reporter

Consumers are winning from cut-throat airline competition in Australia, while airfares this side of the Tasman seem stuck on high.

Four airlines are fighting tooth and nail for their share of the Australian domestic market, and prices are going through the floor.

In the past two weeks, travellers have been able to fly between Sydney and Melbourne - Australia's most popular route - for just $43.21 each way.

At this 6.1c a kilometre price, an equivalent flight between Auckland and Wellington would cost $29.58, instead of the minimum $219 we have to pay.

The super-cheap Australian flights were offered by Impulse Airlines. Only 5000 seats were available and they had to be bought over the internet.

Yesterday, on the website www.infochoice.com.au/travel/flights, the cheapest fare between Sydney and Melbourne was $63.06, again on Impulse and available only through internet bookings. This is just under 9c a kilometre.

Direct comparisons between New Zealand and Australia can sometimes be difficult. The conditions for buying tickets vary.

Despite this, airline competition in New Zealand is very different. Exactly the same fares are offered by the competing companies.

A similar duopoly formerly existed in Australia: Ansett Australia and Qantas shared the domestic market between them. The arrival of Impulse and Sir Richard Branson's Virgin Blue last year set off a chain of price-slashing.

Flying Air New Zealand, the cheapest trip from Auckland to Wellington is a return ticket for $219. The one-way fare is $294. Qantas New Zealand charges exactly the same.

This works out about 45c a kilometre, five times dearer than the cheap deals enjoyed by Australians.

The cheapest Air New Zealand or Qantas New Zealand flight from Auckland to Dunedin (1074km) is $337, which amounts to 31c a kilometre.

Flying the 1176km from Sydney to Adelaide on Ansett, Qantas or Virgin Blue would cost $115 - just under 10c a kilometre.

But Australian consumers have been warned by industry analysts to make hay while the sun of competition shines, as the price war is expected to put at least one of the four airlines out of business.

Air New Zealand blamed rising fuel costs and the low value of the New Zealand dollar when it last raised its domestic airfares.

Spokeswoman Rosie Flay said yesterday that airfares in the two countries could not really be compared and doing it could create "expectations on behalf of customers."

She said fares on our side of the Tasman were realistic.